Precious metals prices are based off supply and demand. Inventories of copper, which show the level of supply, are sitting at the lows not seen in over two years, as reported by the London Metal Exchange. This is due to several reasons, but a large part is that precious metals miners had lower output of copper, because labor strikes hit several large mining stocks.
As a long-term investor, one needs to be aware of what is a short-term problem and what is a real, structural problem. A labor strike by a precious metals miner is not a long-term problem if that issue is resolved, as most are. While the output might be less in the latest quarters, over the long run this kind of pullback is a great opportunity to buy strong mining stocks at relatively cheaper prices.
The copper market is improving, as are most precious metals markets, for several reasons, including the huge amount of financial stimulus being pumped into the global economy by central bankers around the world. The precious metals market looks 12-18 months into the future and this added stimulus is forecasted to increase prices through inflation and boost economic growth levels. This can only benefit mining stocks extracting precious metals.
China consumes almost 40% of copper and what that country does will affect mining stocks. As the Chinese financial authorities pump more money into the system, many mining stocks are looking for a strong move up in copper prices going out several years.
Just recently, we learned that BHP Billiton Ltd. (NYSE/BHP) and Rio Tinto plc (NYSE/RIO) are spending $4.5 billion to expand their Chilean copper mine, a sign that they are very positive about the future prospects in the precious metals space.
The one stock to take a look at out of all of the mining stocks is Southern Copper Corporation (NYSE/SCCO). This precious metals miner produces copper, molybdenum, zinc and silver. Approximately 77% of the production in the past for Southern Copper was in the extraction of copper, with the remainder being split amongst silver, molybdenum and zinc.
Southern Copper has the opportunity to exceed estimates for the next few years if copper prices continue their strong move upwards. The company itself guided 2012 production estimates to be nine percent higher than in 2011. This precious metals miner now sees copper production at 640,000 tons in 2012 compared to 587,491 in 2011. The best part about this precious …
READ MORE : http://www.profitconfidential.com/
www.profitconfidential.com/
- Author Articles
- More From This AuthorThe stock market is holding up well and it has performed strongly since the beginning of the year. I don’t want to rain on its parade, but I do want to mention that Street analysts have been quietly...Buying in the retail sector continues to be selective. Consumer spending continues to show some promise as evidenced by the retail sales reading in January that pointed to a 0.4% rise in total spending,...There are many reasons to be skeptical about this past January’s market rally. One of the most important key indicators flashing a warning sign is the fact that the stock market’s big rise in January...If the S&P 500 Index consolidates around the 1,350 level, then I think it’s fair to argue that the stock market is appropriately valued given all the information we have right now. I’m thinking that...The bulls have been good to us so far in 2012. The stock market continues to show optimism; the key stock indices are displaying a “golden cross, with the 50-day moving average (MA) above the 200-day MA. ...
- Related Articles
- Related ArticlesA truck driver's work is quite a task and is full of intense work hours. The truckers have to move goods between places. This task can be painful. Everyone thinks that a trucker's job seems out to be very...Based on national statistics, approximately 16 million people or 8% of the population in Unites States have diabetes. According to the American Diabetes Association, an estimated of 12,000 to 24,000 cases of...Women shoes are one of the highest sold items at a shopping mall. If the number of online shoe stores is any indicator, shoes are selling pretty well. At any women shoe store that is accessible to a good...Many people feel sad and unconfident because they are born with some physical deformities. These days, cosmetic surgery is the best or even only choice to help them to remove this sadness. As you know, all...Best wedding Photographers Toronto are agreed that name based on their qualifications of taking photos for not only marriage parties, but for other events such as, baptisms, bridal showers and appointment...
- Latest Articles
- Latest ArticlesA truck driver's work is quite a task and is full of intense work hours. The truckers have to move goods between places. This task can be painful. Everyone thinks that a trucker's job seems out to be very...Battersea is the area of the London Borough of Wandsworth, England. This is an inner city district of south London in fare zone 2, although its crossing the south side of the River Thames. Battersea is...Insurance planning is an area that can be more difficult to navigate than normal investment planning or financial planning, as there are mistakes to be made and prices to pay both for doing too little or doing...Based on national statistics, approximately 16 million people or 8% of the population in Unites States have diabetes. According to the American Diabetes Association, an estimated of 12,000 to 24,000 cases of...One of the best ways to keep healthy is through constant workout. Among the best equipments you can use for such workout is the actual dumbbell. These kinds of dumbbells can be found in gyms. But you do...
